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Midwest Metal produces two types of fasteners, Basic and Superior. The Basic fastener sells for $4 and has unit variable costs of $2.60. The

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Midwest Metal produces two types of fasteners, Basic and Superior. The Basic fastener sells for $4 and has unit variable costs of $2.60. The Superior fastener sells for $8 and has unit variable costs of $5.20. The Basic fastener requires half the direct labor hours to manufacture as the Superior fastener. If Midwest has limited direct labor hours, which product should be produced first, and why? Since their contribution margins per direct labor hour are the same, the order of production does not matter. Information about the sales mix is needed before determining which product should be manufactured first. Superior should be manufactured first because it has a higher unit contribution margin and a higher unit selling price. Basic should be manufactured first because Midwest can make twice as many Basic units as Superior units in the same amount of time.

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